Taking a slice of the 5G enterprise market pie
August 6, 2019 - Aleks
Back when the 5G hype began, the enterprise market seemed an enticing opportunity; an alternative source of revenue that would go some way to justify the huge infrastructure cost of 5G and generate some ROI. Today however, the picture is a little different.
Several countries have revealed that they are planning to reserve some spectrum availability for the enterprise market, allowing enterprises to build their own networks, thus bypassing the operator and going straight to the equipment vendors. The reason? Enterprises perceive that operators simply aren't moving quickly enough to adequately meet their 5G needs now, and they're not prepared to wait. And this is where it gets a little worrying for the operators; if they cannot change and adapt to provide the digital, flexible and nimble solutions enterprises need to offer and roll-out 5G private networks, they will soon find themselves on the sidelines of this lucrative opportunity.
Thankfully however, it's not all bad news for operators. According to a recent Capgemini report on 5G industrial operations, nearly 70% of the 800 manufacturing companies surveyed said that 5G was critical to their digital transformation, and that better 5G QoS is something they'd be willing to pay a premium for. This creates an interesting opportunity for operators to effectively monetise their spectrum assets, and use 5G-enabled services to create revenue on a per-slice basis. Turning this into a reality is all dependent on operators' willingness and urgency to change and transform. The 5G enterprise opportunity is there, and it will continue to grow, but if operators cannot shake the perceptions of being obstacles, as opposed to enablers, they'll soon find themselves on the sidelines.
The network slicing opportunity
Operators around the world have invested heavily in 5G, shelling out millions for spectrum licenses and for new technologies to support 5G network architectures. Yet, despite existing investments, the 5G killer use case remains undefined. While operators are continuing to adopt the "build it, and they will come" mantra -- as they have done for previous generations of wireless technology -- 5G will require a little more thought if operators are to see a decent return on investment.
Quality of service (QoS) could very well be one of the answers to operators' current 5G monetization conundrum. Assuring network QoS has long been a challenge for operators. While existing network management tools have been used on 3G and 4G networks to manage some elements of network utilization, in a 5G era -- where data volumes are set to explode -- operators will need to get serious about how they assure QoS and manage network and bandwidth utilization. Network slicing heralds an entirely new opportunity for operators to do this.
Unlike previous network management tools, 5G architectures allow for the network to be divided into different slices, with each slice serving a different application or service. This allows for operators to carefully and selectively allocate network resources on a per-slice basis, and to scale these resources up or down according to real-time requirements. Doing so optimizes how the entire network runs, ensuring optimal capacity utilization, and reducing the likelihood of QoS-related issues impacting the end user. In addition to this, it allows operators to enable QoS-as-a-service, whereby the ability to guarantee QoS on a per-slice basis creates new revenue opportunities for enterprises delivering services from real-time analytics using edge computing, and remote operations through AR/VR technologies, all the way through to AI-enabled and remote-controlled motion for drones or self-driving cars, or video surveillance of remote production lines or machinery.
It's all about transformation
While there's little doubt that an enticing opportunity exists when it comes to 5G enterprise networks, operators have some way to go to turn this opportunity into revenue. Enterprises won't opt to partner with an operator to build their private networks if telcos cannot demonstrate that they can move quickly and deliver agile, modern networks that can evolve according to industry needs and demands.
For this to happen operators must think carefully about their existing technology stacks and monetization tools. Legacy infrastructure will do little to adequately accommodate the services network slicing will enable. While operators may choose to upgrade or rearchitect existing systems, this is likely to be costly and disruptive. Even once upgraded, legacy architectures could still be prohibitive in enabling the full monetization of 5G-enabled services.
Indeed, operators must assess their current monetization tools -- are existing charging systems able to meet the demands of 5G? Will they be able to support various slicing capabilities -- cross-slicing, in-slicing or even hybrid-slicing capabilities? And as we see the emergence of service-specific slices and application-driven slices, how will current charging systems be impacted? What are the capabilities and limitations of their existing charging systems and how will these work in a mature 5G world?
These are important considerations for operators seeking a piece of the 5G enterprise pie. And as network slicing evolves, it is only the operators that can evolve and adapt to deliver fully cloud-based monetization solutions to handle latency-critical services and applications, that will reap the full rewards of network slicing, and allow them to take control of the 5G enterprise opportunity -- and more.
— Niall Byrne, Head of Automated Networks Openet
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